Are Physical ETF’s actually backed by the precious metal?

Are Physical ETF’s actually backed by the precious metal?

  • Yes, every share is backed 100%

    Votes: 3 60.0%

  • No, either not at all or only on a fractional basis

    Votes: 2 40.0%

  • I don’t know and I don’t care

    Votes: 0 0.0%
  • Total voters
    5
My opinion, ETFs are fine for trading just like any other instrument you might trade, but not good for investing. If you want to invest in commodities (metals, etc) then buy the physical.

Again, just my opinion, not fact based.

Peter
 
On reflection, maybe my answer wasn't what you were looking for so I'll try again. Some commodity ETF's invest in futures contracts that get traded or rolled over and NEVER held for delivery, others actually buy the physical product. There are so many ETFs these days who can keep track. Contact the exchange (or google it) if you want more info on a particular ETF.

Peter
 
wackypete2 said:
On reflection, maybe my answer wasn't what you were looking for so I'll try again. Some commodity ETF's invest in futures contracts that get traded or rolled over and NEVER held for delivery, others actually buy the physical product. There are so many ETFs these days who can keep track. Contact the exchange (or google it) if you want more info on a particular ETF.

Peter
Click to expand...

Hi Peter,

I am investing in Precious metal ETF's (Silver is up over 70%:clap:). I keep hearing and reading that Physical Precious metal ETF's are not backed by the metal the Issuer claims to own, and, that the auditors are either being 'fooled' or are part of the 'scam' (Whatever that means). I just want to know what other people think about this rumour. There aren't any facts to support it (yet), it is only UFO type conspiracy theories that are doing the rounds.
 
Silver seems too easy a trade to me... but then so did gold.

I always assume I'll be eaten alive trying to make a trade like that.
 
new_trader said:
Hi Peter,

I am investing in Precious metal ETF's (Silver is up over 70%:clap:). I keep hearing and reading that Physical Precious metal ETF's are not backed by the metal the Issuer claims to own, and, that the auditors are either being 'fooled' or are part of the 'scam' (Whatever that means). I just want to know what other people think about this rumour. There aren't any facts to support it (yet), it is only UFO type conspiracy theories that are doing the rounds.
Click to expand...

I don't trust etfs that claim to hold the physical.
Check here about 1/2 way down the page where it says "ETF gold fraud"
http://www.goldnewswire.net/attack-by-central-bank-lilliputians

and here: http://www.investorvillage.com/smbd.asp?mb=144&mid=9790327&pt=msg

Just food for thought. Maybe they are part of the conspiracy theories but keep on your toes in any case.

Peter
 
I voted no. I haven't crunched the numbers on even one ETF but I'm not having it for one minute.
 
Not saying they are all bad but I can't see all of them holding the physical.
On another note, as an accountant I lul @ that letter.
 
Code:
scose-no-doubt said:
I voted no. I haven't crunched the numbers on even one ETF but I'm not having it for one minute.
Click to expand...

All very well, but where do you draw the line with ETF's? What if you want to build a portfolio using stock and bond ETF's? What if you want to invest,not trade, but invest in Commodities Jim Rogers style, what are the options? None basically, I mean, where would you store the wheat for a start. Also, where do you store your gold and silver if you are a physical bug? Would you feel 'safe' keeping £10,000's worth hidden around the house and garden? What if you have no garden...etc...
 
Don't mention an allocated account because then you have the same issues as an ETF!
 
I understand their use as a vehicle but I'm just not having that all the ones that say they are backed by physical are actually 100% backed by physical.
 
scose-no-doubt said:
I understand their use as a vehicle but I'm just not having that all the ones that say they are backed by physical are actually 100% backed by physical.
Click to expand...

There aren't that many. That is the point...well 'a' point. You could invest in a few to spread the risk. Which I am doing anyway.
 
new_trader said:
There aren't that many. That is the point...well 'a' point. You could invest in a few to spread the risk. Which I am doing anyway.
Click to expand...

Probably the wise thing to do. As you alluded to, you really wouldn't want to keep a few gold or silver bars under your pillow!

Peter
 
I’ve traded the physical ETFs with ETF Securities for the last few years. They call them Exchange Traded Commodities (ETCs) and are audited and have bar counts available etc, so I’ve not had any doubt about them. They track the spot price closely unlike the futures backed ETFs, so are a good option. They have Gold, Silver, Platinum and Palladium and have just launched physical Copper, Nickel and Tin, but the new ones are thinly traded so not the best option at the moment as spreads are wide.

Another option is to buy physical bars of gold and silver with Bullion Vault. They have 3 vaults of gold in London, Switzerland and New York, so you can buy portions of actual bars and even have you own allocated bars. They never leave the vault I believe and the costs seem low and you can trade in £,$ and €
 
isatrader said:
I’ve traded the physical ETFs with ETF Securities for the last few years. They call them Exchange Traded Commodities (ETCs) and are audited and have bar counts available etc, so I’ve not had any doubt about them. They track the spot price closely unlike the futures backed ETFs, so are a good option. They have Gold, Silver, Platinum and Palladium and have just launched physical Copper, Nickel and Tin, but the new ones are thinly traded so not the best option at the moment as spreads are wide.

Another option is to buy physical bars of gold and silver with Bullion Vault. They have 3 vaults of gold in London, Switzerland and New York, so you can buy portions of actual bars and even have you own allocated bars. They never leave the vault I believe and the costs seem low and you can trade in £,$ and €
Click to expand...

Good stuff. Thanks for the information. (y)

Peter
 
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